Robert Lawrence and Attorney General's Department [2004] NSWIRComm 59 - NSWIRComm 1995 case summary — Zoe

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Robert Lawrence and Attorney General's Department [2004] NSWIRComm 59

[2004] NSWIRComm 59

Industrial Relations Commission (NSW)|1995-03-29|Before: Sams DP, Spender AJ

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Source facts

Court

Industrial Relations Commission (NSW)

Decision date

1995-03-29

Before

Sams DP, Spender AJ

Source

Original judgment source is linked above.

Judgment (122 paragraphs)

[1]

CITATION : Robert Lawrence and Attorney General's Department [2004] NSWIRComm 59 APPLICANT: PARTIES : Robert Lawrence RESPONDENT: Attorney General's Department FILE NUMBER: 3864 of 2003 CORAM: Sams DP Termination of employment - unfair dismissal - Sheriff's Officer - applicant also engaged as private security officer - secondary employment - failure to disclose secondary employment - workplace injuries - applicant engaged in secondary employment while on sick leave and workers' compensation - overpayment of workers' compensation - waiver of debt - failure to disclose other work - duties of security officer and Sheriff's Officer - medical evidence - whether management aware of secondary employment - principle of condonation - whether dismissal too harsh - whether conduct wilful - repudiation of contract - procedural fairness - state of evidence - principles considered - remedy of compensation sought. CATCHWORDS : Held, applicant informed management of secondary employment - management aware of applicant's secondary employment - respondent condoned conduct - paucity of respondent's evidence - conduct not wilful breach of contract of employment - medical evidence not inconsistent - different duties of security officer - financial hardship of applicant not taken into account - otherwise unblemished record not taken into account - dismissal too harsh - dismissal harsh and unreasonable - compensation appropriate remedy - mitigation of loss - orders made - recommendation to waive overpayment debt. Industrial Relations Act 1996 LEGISLATION CITED : Public Sector Management Act 1988 Workers' Compensation Act 1987 Australian Transport Officers' Association v Department of Motor Transport (1988) 25 IR 235 Bankstown City Council v Paris (1999) 93 IR 209 Bigg & Anor v NSW Police Service (1998) 80 IR 434 Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 Busways v Johnson (1994) 55 IR 255 Byrne & Anor v Australian Airlines (1995) 61 IR 32 Cementaid (NSW) Pty Ltd v Chambers (unreported, Supreme Court, Spender AJ, 29 March 1995) Clarke v Metropolitan Meat Industry Board [1967] AR (NSW) 16 Concut Pty Ltd v Worrell and Anor (2000) 103 IR 160 D & R Commercial Pty Ltd v Flood (2002) 113 IR 344 Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296 Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, on behalf of Bowman, and City of Sydney Council [2001] NSWIRComm 91 Franklins Ltd v Webb (1996) 72 IR 257 Hill v Department of Juvenile Justice [2000] NSWIRComm 128 Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] 1 CH 169 Hollingsworth v Commissioner of Police (1997) 77 IR 339 CASES CITED : Humphries and Cootamundra Ex-Services and Citizens Memorial Club Limited [2003] NSWIRComm 211 Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 Hunt v Hornsby Shire Council [2001] NSWIRComm 242 John Lysaght (Australia) Limited and Federated Ironworkers' Association of Australia, New South Wales Division & Ors (1972) AILR 517 Outboard World v Muir (1993) 51 IR 167 Paris v Bankstown City Council [1999] NSWIRComm 10 Pastrycooks Employees, Biscuit Maker Employees & Flour and Sugar Goods Workers Union (NSW) v Gartrell White (No 3) (1990) 35 IR 70 Phillips v Foxall (1872) LR 7 QB 666 Police Association of New South Wales on behalf of Adam Tregonning, and New South Wales Police Service [2000] NSWIRComm 14 Price v Box Valley Pty Ltd (1999) 90 IR 480 Shop, Distributive & Allied Employees' Association v Jewel Food Stores (1987) 22 IR 1 Staal and Tupene and Health and Research Employees' Association of New South Wales (on behalf of Nagy and Others) and Western Sydney Area Health Service [2004] NSWIRComm 27 Standley and Electronics Boutique Pty Ltd (unreported, Sams DP, IRC98/4516, 18 March 1999) Transport Workers' Union of Australia, New South Wales Branch, on behalf of Joseph Vallis, and TNT Australia Pty Limited, trading as TNT Express [2002] NSWIRComm 46 Wang v Crestell Industries Pty Ltd (1997) 73 IR 4 Western Suburbs District Ambulance Committee v Tipping (1957) AR (NSW) 273 Youssef and Western Sydney Area Health Service [2002] NSWIRComm 8

[7]

3 The applicant had continued to work his secondary employment whilst on workers' compensation. He claimed his doctors were aware of these duties and had confirmed that the type of work undertaken would not exacerbate his injury or impede his recovery. The applicant also claimed that his primary employer was well aware of his secondary employment. However, following a Departmental inquiry in 2002 the applicant was charged on 30 December 2002 with alleged breaches of discipline. Those charges were detailed as follows: 1. That on 9 March 2001 you were misleading in your Statutory Declaration to the Director-General in relation to your income when relying on financial hardship in relation to a salary over payment. The particulars are that: i. Between 22 May, 2000 and December, 2000 you were paid a full salary and not the Statutory Rate applicable under the provisions of the Worker's Compensation Act, 1987. A portion of the overpayment was offset by make-up pay (recreation/long service leave) leaving an overpayment balance of $5,572.22. In your submission to the Director-General seeking that the overpayment be waived you failed to inform him that you were engaged in secondary employment with Satinvale Associates at the same time as you were receiving workers' compensation benefits and during the period the overpayment occurred. In a private discussion with the Director-General at Sutherland in February 2001, you again failed to inform him that you were engaged in secondary employment with Satinvale Associates. Your actions were in breach of the Department's Code of Conduct and Ethics. 2. That since 9 January 1999, you engaged in secondary employment without the approval of the Director-General or his delegate. The particulars are that: i. you engaged in secondary employment with the South Eastern Sydney Area Health Service between 9 January and 14 November 1999 as an on-call casual employee, undertaking security work. ii. you engaged in secondary employment with Stylish Security Pty Ltd between March and September 1999 as a car park security officer; and iii. You engaged in secondary employment with Satinvale Associated Pty Ltd between January 2000 and the present as a gatehouse keeper. Your actions were in breach of the Department's Code of Conduct and Ethics and the Public Sector Management Act. 3. That between February 2000 and 13 February 2001, you undertook secondary employment with Satinvale Associates whilst in receipt of workers' compensation benefits and in breach of s57 of the Workers Compensation Act, 1987. The particulars are that: i. you were certified medically unfit to return to your primary employment as a Sheriffs Office (sic) and you were in receipt of workers compensation benefits as a result. ii. Between February, 2000 and 13 February, 2001, you worked on various occasion (sic) for Satinvale Associates as a gatekeeper at the Caltex site at Birchgrove NSW; and iii. you failed to notify the insurer, as required under s57 (1)(a) or (b) that you had engaged in secondary employment or that there had been change to your earnings. Your actions were in breach of the Department's Code of Conduct and Ethics, the Public Sector Management Act and the Workers's Commensuration Court (sic), 1987. 4. That from 14 February, 2001 you exposed yourself to further injury during your structured Return to Work program by engaging in secondary employment on various occasions with Satinvale Associates which was outside the terms of the Return to Work Program and occurred without the approval or knowledge of the Sheriff's Office Rehabilitation Co-Ordinator, the insurer's Rehabilitation Consultant or your immediate supervisor. The particulars are that: i. you continued to work on various occasions with Satinvale Associates as a gatekeeper at the Caltex sit (sic) at Birchgrove NSW; ii. the work you undertook was outside the scope of the duties identified by your treating physicians (ie Clerical or administrative duties) and exposed you to potential danger and further injury from either intruders or fire. This was contrary to the Department's Code of Conduct and Ethics, Public Sector Management Act and the Workers Compensation Court (sic) 1987 5. That on 25 and 26 October 1999 you engaged in secondary employment with the South Eastern Sydney Area Health Service at the Caringbah and Sutherland Hospital when you were on paid sick leave from your primary employment with the Attorney General's Department. The particulars are that: i. you submitted a medical certificate which stated you were unfit to attend for duty on 25 and 26 October. 1999 because of abdominal pains; ii. on 25 and 26 October 1999 you attended the Caringbah and Sutherland Hospital in the course of your secondary employment and undertook a First Aid Course, a requirement of the duties you undertook at that workplace. Your actions were in breach of the Department's Code of Conduct and Ethics and the Public Sector Management Act. 6. You failed to disclose to the Government Insurance Office your secondary employment with Satinvale Associates when completing a Questionnaire and Statutory Declaration on 4 April 2000 in relation to the calculation of the future workers' compensation benefits you were to receive. The particulars are that: i. When you completed the questionnaire at page 3 of 5, in response to question, "Since you have been receiving workers' compensation benefits have you done any work for wages or salary" you recorded the answer "No". ii. On 10 October, 2000 you disclosed to the insurer when you completed a further questionnaire and Statutory Declaration that you had engaged in secondary employment with Satinvale Associates since February, 2000, working one or two shifts per month for $200.00 per shift. iii. During the financial years 1999/2000 and 2000/2001 you declared to the Commissioner of Taxation income earned with Satinvale Associates in the sum of $5,285 and $26,083 respectively. Your actions were in breach of the Department's Code of Conduct and Ethics and the Worker's Compensation Act, 1987.

[49]

45 In respect to the second allegation, the applicant had acknowledged that he was engaged in secondary employment for three different companies. It was also acknowledged that written approval to do so was not sought. However, Mr Gibian said that the relevant section of the Public Sector Management Act does not disclose how an officer should seek permission to undertake secondary employment. He referred to s80 of the Act: 80 Officer not to engage in other employment without permission (1) An officer shall not: a) accept or continue to hold or discharge the duties of or be employed in any paid office in connection with any banking, insurance, mining, mercantile or other commercial business, whether it is carried on by a corporation, company, firm or individual, or b) engage in or undertake any such business, whether as principal or agent, or c) engage in or continue in the private practice of any profession, occupation or trade, or enter into any employment, whether remunerative or not, with any corporation, company, firm or individual so engaged, except with the permission of the appropriate Department Head. (2) The appropriate Department Head may withdraw any permission at any time. (3) Subsections (1) and (2) are subject to any other Act that expressly applies to officers. (4) If an officer: a) is the holder of an office or position, or b) is engaged in any employment whatever, otherwise than in connection with the duties of the officer's position under the Crown, the officer must at once notify the fact to the appropriate Department Head. (5) If an officer has given a notification to the appropriate Department Head under subsection (4), that Department Head may require the officer to resign the office or position or to abstain from engaging in the employment. (6) Nothing in this section prevents an officer from accepting and continuing to hold office in any friendly society established for the benefit of public servants only. (7) This section does not apply to chief executive officers or senior executive officers.

[80]

75 In Byrne and Anor v Australian Airlines (1995) 61 IR 32 the High Court said a termination of employment "may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted" (p72). In Electricity Commission of New South Wales t/as Pacific Power v Crump at p302 the Full Commission said: The conciliation commissioner, therefore, in our view of his decision, was concerned that the ultimate sanction of termination of employment was too severe a penalty. That approach was properly open to the conciliation commissioner, notwithstanding his favourable finding as to the action of the appellant, is supported by the decision of Watson J in Metropolitan Meat Industry Board v Australasian Meat Industry Employees' Union, New South Wales Branch [1973] AR (NSW) 231 at 233 as follows : I fail to see why in applying this test to determine whether or not he should intervene, and having in mind the considerations referred to by Sheldon J in Loty's case [1971] AR (NSW) 95 at 99, the commissioner (or the Commission on appeal) is precluded from considering whether or not termination was too severe a penalty in all the circumstances - even if the dismissal was legally justified or even if, as Mr McDevitt put it, the point had been reached where at the particular time the employer's representative was faced with a situation which had developed to a stage where he had no other alternatives. In some cases, the issue of unfairness has been resolved because of the way in which the employer has exercised his right to dismiss or because of the absence of adequate justification for dismissal. But even if there are grounds for terminating the contract of employment, it is still open to the tribunal to examine the severity or otherwise of the step of dismissal. The Commission, commissioners and committees have so acted in the past and have intervened to order reinstatement where because of mitigating circumstances or past good conduct, termination has been shown to be too harsh a consequence. See also Little v Commissioner of Police (No.2) (2002) 112 IR 212, Busways v Johnson (1994) 55 IR 255 and Wells v Commissioner of Police (2000) 100 IR 106.

[88]

The 1959 English case referred to makes it plain that an act of disobedience or misconduct (justifying dismissal) requires also that the disobedience must be " wilful ": … I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is "wilful": it does (in other words) connote a deliberate flouting of the essential contractual conditions. (P288). Hungerford J in Day v Lumley Life Limited (1999) 90 IR 70, described the employment relationship as a serious contractual relationship involving rights and obligations on both sides: The employment relationship, I have to say, is a serious relationship with important incidents for both parties to it. It is a consensual relationship based on contract and with respective rights and obligations. It should not, I think, operate, or to be so seen, in practice in a way, which permits one party, here, the employer, to act in a one-sided manner contrary to the legitimate expectations and understandings of the other party, here the employee, and particularly where such action damages or detrimentally affects the career interests of the employee. Employees have a corresponding duty to act with fidelity and good faith. In Concut Pty Ltd v Worrell and Anor (2000) 103 IR 160, his Honour, McHugh J, dealt with the ordinary relationship of the employer and employee at common law: The ordinary relationship of employer and employee at common law is one importing implied duties of loyalty, honesty, confidentiality and mutual trust. At common law: "[c]onduct which in respect of important matters is incompatible with the fulfillment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. ... [T]he conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises." In the present case, the findings at trial went beyond mere uneasiness as to the future. They necessitated, or at least warranted, a conclusion that the "confidence" essential to the relationship of employer and employee had been destroyed. Instead of pursuing the interests of the company and its shareholders, the employee had pursued his own private interests. Not only was the employee in breach of his duty of fidelity and trust owed to the employer, he had remained in breach of that duty to the date of the trial. Until that time he had not accounted for the benefits wrongly appropriated by him. Indeed, he had denied any wrongful appropriation. The issue so tendered at the trial was determined against the employee. He was then subject to the employer's counter-claim for an order to make a refund. Such order was duly made at trial. It was not contested on appeal. Given his senior status in the company's service and the nature and extent of the misconduct disclosed in the evidence and accepted by the primary judge, it was open to him to find that the employee had undermined the confidence essential to the ongoing relationship of employment. Prima facie, this had afforded a legal justification for the employee's summary dismissal. It is, however, only in exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee, once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general position may exist for trivial breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer. Some breaches may be judged irrelevant to the duties of the particular employee and an ongoing relationship with the employer. But these exceptional cases apart, the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee like Mr Wells, will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal. See also Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66; Transport Workers' Union of Australia, New South Wales Branch, on behalf of Joseph Vallis, and TNT Australia Pty Limited, trading as TNT Express and Hunt v Hornsby Shire Council [2001] NSWIRComm 242.

[93]

85 It is now well settled industrial law that each of the words - harsh, unreasonable and unjust - have their own discrete meaning and not all three descriptions of a dismissal are necessary for a finding of unfairness. In other words, a particular dismissal might be found to be "harsh" but not "unreasonable" or "unjust". This principle arises from the oft-quoted authority in Byrne & Anor v Australian Airlines where the expression "harsh, unreasonable or unjust" was considered in an Award clause. In their joint judgment McHugh and Gummow JJ said at p72: It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. 86 The principle was further discussed in Outboard World v Muir (1993) 51 IR 167 where a Full Commission said: First we deal with the argument for the appellant that the Commission erred by applying the wrong test in connection with the dismissal: 'unfair' rather than 'harsh, unreasonable or unjust' dismissal. We agree with Mr Reitano's submission in this respect that the reference by the Commissioner to "unfairness" did not represent any misunderstanding of the correct test but was merely the use of a shortened form of expression intended to embrace the three relevant words. Whilst we recognise that there may be a natural tendency (recognised in the use even by the advocate for the Company before the Commissioner of the term 'unfair') to use the shortened form, we consider that it is preferable that a member of the Commission utilise the precise words provided by s246, rather than the catch-all heading, particularly when expressing the basis for a finding that a dismissal is within one or more of the heads provided by the section. We take this view because, even though there may be some circularity in the full phrase 'harsh, unreasonable or unjust', we detect scope for variation of meaning which may be critical to the determination of a particular matter and may be obscured by the use of the substitute term "unfair". Different but not wholly dissimilar words, "unfair", "harsh", and "unconscionable", are used in s275, power of the Industrial Court to Declare Certain Contracts Void, of the 1991 Act. In relation to those words, then appearing in s88F of the 1940 Act, the Commission in Court Session ( Perrignon , Cahill and Dey JJ) in A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 at 418 Cahill J (delivering a separate judgment) said: The duty of the Commission is to reach a conclusion on the issues of whether the subject transaction is 'unfair', or 'harsh' or 'unconscionable'.